USA CAR Act

This bill would let people deduct the interest they pay on certain car loans from their federal income taxes. To qualify, the loan must be used to buy a car that was finally assembled in the United States, and the loan must be tied to the car itself (the car is the collateral). This new deduction would apply only to loans taken out on or after January 1, 2025.

Key points

• Who is affected: People who take out car loans for vehicles assembled in the U.S..
• What changes: Interest paid on qualifying car loans could be tax-deductible.
• Which loans qualify: Loans taken out on or after January 1, 2025; used to buy the car; and secured by that car.
• What vehicles qualify: Automobiles made by a manufacturer, with final assembly in the United States (the bill explains “final assembly” as the process that delivers the car to a dealer with all parts needed for it to run).